Dole change likely in May budget

The federal government will respond in late February to a Senate investigation into the Newstart allowance, and will probably recommend a change ahead of the May budget.

It is understood that cabinet would consider modelling from three options to broaden the payment, which has been in the spotlight since the government changed the rules for single parents and after Families Minister
Jenny Macklin
said she could live on the Newstart allowance.

It is understood there is strong support in cabinet to increase the number of hours that can be worked while receiving the benefit, rather than raising the rate, which reinforces the government’s theme of getting people back into work.

The cabinet is also mindful that Treasurer
Wayne Swan
’s departure from the budget surplus this year does not mean it is “open slather" to appease the party’s Left, welfare groups and the Greens with a $50 a week increase.

The issues reached a head on Friday when Prime Minister
Julia Gillard
rebuffed her predecessor
Kevin Rudd
after backbench MPs supported his comment that Labor would be heartless not to approve a rise in the dole when it had abandoned its pledge to return the budget to surplus.

“I’m just saying we are the Labor party, we are a Labor government, we have got responsibility for people who are doing it tough and people who need a bit of a hand up, and therefore, we could be doing more," Mr Rudd told the ABC on Friday. “I think people need to show a bit more of a heart."

Ms Gillard faced questions on the comments as she announced the terms of reference of a royal commission into child sex abuse.

“I’ve dealt with this question before and indicated it’s very tough for people on low and fixed incomes to make ends meet. We keep our focus on creating jobs because the best thing we can do for anybody who’s experiencing unemployment is to make sure that there’s a job available for them," she said.